Bank says Liverpool 'financially healthy'

SOCCER TRANSFER NEWS:THE ROYAL Bank of Scotland has taken the remarkable step of writing to Liverpool supporters to explain its continued financial support for the club's unpopular owners, Tom Hicks and George Gillett.

The bailed-out bank has faced severe criticism from Liverpool supporters angered at plans to extend the Americans’ €4111 million credit facility with the RBS and Wachovia ahead of the July 24th deadline. Fans’ protests coincided with revelations that Hicks and Gillett’s parent company, Kop Football (Holdings) Limited, suffered a €50 million loss for the year ending July 2008.

However, in a response that effectively confirms the bank is content to refinance again next month, the RBS insists the club is “financially healthy”, able to meet its debt obligations “comfortably” and revealed it hopes to continue its relationship with Liverpool “for many years to come”.

It also stressed the British government does not make commercial decisions for the bank since last year’s rescue package. This follows attempts by a local MP, Peter Kilfoyle, to persuade the government to block the refinancing deal because of the absence of the proposed new stadium on Stanley Park and the repercussions for the regeneration of the area.

“The club does not suffer the burden of debt implied [in the press] and, in our view and that of the executive management of the club, it is financially healthy and able to service comfortably its debt obligations from cash flow generated by its playing and commercial activities,” the RBS explained.

“It is in our commercial interest to support the club so that it can continue to perform successfully on and off the pitch.”

The debt on the club, according to the RBS, is lower than the debt on the parent company to ensure Hicks and Gillett are legally responsible for the majority of the loans on Liverpool. Representatives of the Spirit of Shankly supporters group, however, claim a similar situation did not prevent Southampton from falling into financial peril.

Gillett and Hicks will be asked to increase their personal guarantees in the next refinancing deal with the former agreeing a €391 million deal for his stake in the Montreal Canadiens last weekend.

Glen Johnson, meanwhile, completed his €20 million transfer from Portsmouth to Liverpool yesterday when he signed a four-year contract worth €94,000 a week in a deal that is likely to precipitate the departure of Alvaro Arbeloa. Johnson had a medical last week and agreed personal terms on his return from holiday.

Liverpool manager Rafael Benitez has admitted he had to act quickly in a “crazy” market to secure the signing of the defender.

“We had to be quick. It was down to the player whether he chose us or (Manchester) City or Chelsea and he chose us. It was very clear from talking to him that he wanted to play for Liverpool,” said the manager, Rafael Benitez.

Doubts over Liverpool’s financial position may be diminishing but the same cannot be said of the speculation surrounding Xabi Alonso. Spain’s semi-final defeat to the USA, ending their hopes of winning the Confederations Cup in South Africa, appears likely to intensify the battle for the midfielder.

Reports in the Spanish press claim Real Madrid coach Manuel Pellegrini has travelled home to Chile for a short holiday with assurances from the club that they will sign the 27-year-old.

AS suggest Pellegrini has been promised a midfield of Lassana Diarra, Kaka, Cristiano Ronaldo and Alonso by Real president Florentino Perez. The first two are already on board while Manchester United forward Ronaldo is on the verge of a record-breaking €94 million move so that only leaves one more player for the full set.

Benitez, however, is keen to hang on to Alonso and his other first-choice central midfielder Javier Mascherano, who is wanted by Barcelona. He will, though, try to raise more funds for transfers by selling Argentina winger Sebastian Leto to Panathinaikos, Andriy Voronin – who spent last season on loan at Hertha Berlin – and possibly Andrea Dossena.

Italy left-back Dossena has been linked with a move to Juventus but his agent has admitted it may not be as straightforward as first thought.

“For the time being, I have not met (Juventus sporting director) Alessio Secco and I don’t have an appointment set up with him in the near future,” Dossena’s agent Roberto La Florio told Corriere dello Sport.

“At this time I don’t know if Dossena will join Juventus. We can only wait, we are not in a hurry. In any case the lad (Dossena) is also happy at Liverpool. We can only wait.”

Guardian Service